Installments are used throughout the world to enable consumers to make purchases that they may otherwise be unable to make. In some places, merchants manage installments, enabling a consumer to purchase a product and pay for that product over time. In other places, issuing financial institutions (“issuers”) may manage installments, paying for a purchase on behalf of the consumer and then charging that consumer's transaction account for the purchase over time. In either instance, the consumer is able to make their purchase immediately, and pay it off over time, which can be beneficial if the consumer has a low credit limit, is unable to build up savings, etc.
In many instances, installments either at the time of a transaction or after the transaction has already been processed. For instance, an installment managed by a merchant is often created at the point of sale during the checkout process, where the transaction is processed for the regular installment amount and the consumer charged the additional installments at the agreed period of time. Installments managed by issuers are often created after a transaction has been processed, where the consumer may identify a processed transaction that the issuer does not immediately charge to the consumer, but instead charges installment amounts at predetermined installment periods to the consumer's account. For installments created after a transaction has been processed, the consumer must have the full purchase amount initially available for the purchase, which may be unfeasible and go against one of the primary benefits of an installment. Additional information regarding the creation of installments subsequent to transaction processing can be found in U.S. patent application Ser. No. 14/219,215, entitled “Method and System for Consumer Behavior Modeling Based on Installment Payments,” filed Mar. 19, 2014 by David Grossman; and U.S. Provisional Patent Application No. 62/160,328, entitled “Method and System for POS Enabled Installments with Eligibility Check Requirements,” filed May 12, 2015 by Vijila Sudhakar et al., which are herein incorporated by reference in their entirety.
Thus, there is a need for a technical solution that can enable initially processing a transaction as an installment, without the need for modification to existing points of sale and without adversely affecting involved merchants. Such a solution would enable merchants to transact normally and consumers to utilize installments without the need for availability of the full purchase amount. By pre-approving a transaction for processing as an installment, a transaction could be flagged during its processing to ensure that it is processed correctly as an installment, which would increase the efficiency of such processing.